Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Extended Internal Rate of Return calculates the annualised return for investments with irregular dates and amounts, such as SIPs.
XIRR is the return measure you should use when you invest or withdraw money on different dates — like monthly SIPs or partial redemptions.
XIRR solves for the discount rate that sets the net present value of all cash flows to zero, using actual transaction dates. It generalises IRR for non-periodic flows common in Indian mutual fund statements.
You SIP ₹5,000 on the 5th of each month for 3 years and redeem ₹2,10,000. XIRR might show 11.8% even though point-to-point CAGR on any single instalment would differ.
Most AMC portals, CAS statements, and portfolio trackers show XIRR for holdings with multiple transactions. You can also compute it with an XIRR calculator using dated cash flows.
Negative XIRR means the current value of your investments is below total money invested, after accounting for timing of each instalment.
Use CAGR for single lump-sum investments over a fixed period. Use XIRR when cash flows are irregular, especially for SIP, SWP, or staggered redemptions.